The FICA tax rate is split between two programs: Social Security takes 6.2% of your wages, and Medicare takes 1.45%
When you see "FICA" on your pay stub, you're looking at two separate taxes that come out of your paycheck. Social Security withholds 6.2% of your gross wages up to a yearly earnings cap. Medicare withholds 1.45% of all your gross wages with no cap. Together, they total 7.65% — though the amount you actually pay depends on how much you earn and whether you're self-employed.
Your employer pays an equal amount on your behalf. If you're self-employed, you pay both the employee and employer portions yourself, which means the self-employment tax rate is 15.3% of your net earnings from self-employment.
Key Takeaways
- Social Security withholds 6.2% of wages up to $168,600 in 2024, while Medicare withholds 1.45% of all wages with no earnings limit.
- If you earn over $200,000 as a single filer (or $250,000 married filing jointly), an additional 0.9% Medicare tax applies to income above that threshold.
- Self-employed workers pay 15.3% total because they cover both the employee and employer portions, though they can deduct half of it.
- The Social Security wage cap changes each year based on average wage growth, so the maximum you contribute changes annually.
- FICA taxes fund current Social Security and Medicare benefits; they are not deposited into an account in your name.
Social Security tax: 6.2% up to the annual wage cap
The Social Security portion of FICA is 6.2% of your wages, but only up to a maximum amount each year. In 2024, that cap is $168,600. If you earn $168,600 or less, you pay 6.2% on all of it. If you earn $200,000, you pay 6.2% only on the first $168,600, and nothing on the remaining $31,400.
The wage cap increases most years because it's tied to the national average wage index. The Social Security Administration announces the new cap in October for the following year. This means if you change jobs mid-year or have multiple employers, you could end up paying more than you should — but you can claim the overpayment as a credit on your tax return.
If you work for more than one employer in the same year, each employer withholds 6.2% on your full wages to them, even if your combined earnings exceed the cap. For example, if you earn $100,000 from Job A and $80,000 from Job B, both employers will withhold 6.2%, totaling $11,160 in Social Security tax. Since your combined earnings are $180,000 and the cap is $168,600, you overpaid by $74.80. You recover this when you file your tax return.
Medicare tax: 1.45% on all wages, plus 0.9% if you earn above a threshold
Medicare tax is 1.45% of your gross wages with no earnings cap. Unlike Social Security, there is no maximum amount — you pay 1.45% on every dollar you earn. This portion funds Medicare Part A, which covers hospital insurance.
If your income exceeds certain thresholds, you pay an additional 0.9% Medicare tax. The threshold is $200,000 for single filers, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. This additional tax applies to wages above the threshold. For example, if you're single and earn $220,000, you pay the standard 1.45% on all $220,000, plus an extra 0.9% on the $20,000 above $200,000, for a total of $3,268 in Medicare tax.
Your employer withholds the additional 0.9% Medicare tax if your wages exceed the threshold at that employer. However, if you have multiple employers and your combined wages exceed the threshold, the withholding may not be correct — you'll reconcile it when you file your tax return.
Self-employment tax: 15.3% because you pay both portions
If you're self-employed, you pay both the employee and employer shares of FICA taxes yourself. This is called self-employment tax, and it totals 15.3% — 12.4% for Social Security (the combined 6.2% + 6.2%) and 2.9% for Medicare (the combined 1.45% + 1.45%).
You calculate self-employment tax on your net earnings from self-employment, not your gross revenue. Net earnings are what's left after you subtract business expenses. You pay self-employment tax on Schedule SE (Form 1040), which you file with your income tax return.
The good news is that you can deduct half of your self-employment tax when you calculate your adjusted gross income. This deduction reduces your taxable income, which lowers your income tax bill. The Social Security wage cap still applies — in 2024, you pay the 12.4% Social Security portion only on the first $168,600 of net self-employment earnings. The 2.9% Medicare portion applies to all net earnings, plus the additional 0.9% if your total income exceeds the threshold.
How the wage cap affects high earners
The Social Security wage cap creates a ceiling on how much you contribute to Social Security each year. Once you reach the cap, you stop paying the 6.2% Social Security tax for the rest of that year. This means high earners pay a smaller percentage of their total income into Social Security than lower earners do.
For example, someone earning $168,600 pays $10,453.20 in Social Security tax (6.2% of $168,600). Someone earning $336,000 pays the same $10,453.20 in Social Security tax, because the cap stops the withholding at $168,600. As a percentage of total earnings, the high earner pays 3.1% while the lower earner pays 6.2%.
The wage cap does not explore to Medicare tax. High earners pay 1.45% on all wages, plus the additional 0.9% Medicare tax if they exceed the income threshold. This means the total FICA burden on high earners is weighted more heavily toward Medicare than Social Security.
FICA tax rates for employees versus employers
| Tax Component | Employee Rate | Employer Rate | Combined Rate | Wage Cap (2024) |
|---|---|---|---|---|
| Social Security | 6.2% | 6.2% | 12.4% | $168,600 |
| Medicare | 1.45% | 1.45% | 2.9% | None |
| Additional Medicare (income over threshold) | 0.9% | None | 0.9% | $200,000 single |
| Total | 7.65% (or 8.55% if over threshold) | 7.65% | 15.3% (or 16.2% if over threshold) |
What happens if you overpay FICA taxes
Overpayment happens most often with Social Security tax when you work for multiple employers or change jobs during the year. Each employer withholds 6.2% on your full wages to them, even if your combined earnings exceed the annual cap. You don't lose this money — you recover it when you file your income tax return.
When you file Form 1040, the IRS compares your total Social Security withholding against the cap. If you overpaid, the excess appears as a credit on your return, which reduces your tax bill or increases your refund. You don't need to do anything special to claim it; the IRS calculates it automatically.
Overpayment of the additional 0.9% Medicare tax works the same way. If you have multiple employers and your combined wages exceed the threshold, one or both employers may not withhold the additional tax correctly. You'll reconcile this on your tax return when you file.
Frequently Asked Questions
Does the FICA tax rate change every year?
The tax rates themselves (6.2% for Social Security, 1.45% for Medicare, 0.9% additional Medicare) do not change. However, the Social Security wage cap does change most years. The IRS announces the new cap in October for the following year based on average wage growth.
Why do I pay FICA taxes if I'm already paying income tax?
FICA and income tax are separate taxes that fund different programs. FICA taxes fund Social Security and Medicare benefits. Income tax funds general government operations. You pay both on your wages.
Can I opt out of paying FICA taxes?
No. FICA taxes are mandatory for all employees and self-employed people. The only exceptions are certain religious groups and some government employees with their own pension systems, and these require specific documentation and approval.
What if I earn income that's not from wages or self-employment?
FICA taxes explore only to wages and net self-employment income. Investment income, rental income, and other passive income are not subject to FICA taxes, though they may be subject to income tax or other taxes.
How do I know if I owe the additional 0.9% Medicare tax?
You owe the additional 0.9% Medicare tax if your wages, self-employment income, or other compensation exceeds $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). Your employer should withhold it automatically if you exceed the threshold at that employer. You'll reconcile any shortfall when you file your tax return.